SECURING NEW DRUGS FOR FUTURE GENERATIONS: THE PIPELINE OF ANTIBIOTICS - THE REVIEW ON ANTIMICROBIAL RESISTANCE
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SECURING NEW DRUGS FOR FUTURE GENERATIONS: THE PIPELINE OF ANTIBIOTICS THE REVIEW ON ANTIMICROBIAL RESISTANCE CHAIRED BY JIM O’NEILL MAY 2015
2
CONTENTS
FOREWORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. WHICH NEW DRUGS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. IS THERE A PROBLEM WITH THE MARKET FOR ANTIBIOTICS
AND HOW SHOULD IT BE CORRECTED?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. CREATING A MORE PREDICTABLE MARKET FOR ANTIBIOTICS
TO SUSTAIN COMMERCIAL INVESTMENT IN R&D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. THE AMR INNOVATION FUND - MORE MONEY FOR
EARLY-STAGE RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5. MID-STAGE INTERVENTIONS: OILING THE GEARS
OF ANTIBIOTIC DEVELOPMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6. THE COSTS OF TAKING ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7. OUR NEXT STEPS: MOVING FROM IDEAS TO ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
APPENDIX
A COSTING A PACKAGE OF PULL INCENTIVES FOR NEW ANTIBIOTICS:
WHAT AND HOW MANY ARE NEEDED? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
B. FURTHER INTERVENTIONS WE HAVE CONSIDERED BUT NOT
CHOSEN TO RECOMMEND IN THIS PAPER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
C. MODELLING THE ANTIBIOTIC DEVELOPMENT PROCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411
FOREWORD:
JIM O’NEILL, CHAIRMAN OF THE REVIEW
Multiple factors drive the development and spread of The problem of the global pharmaceuticals market failing to
antimicrobial resistance (AMR). It is a complex issue to which produce drugs to respond to unmet medical needs is not a new
there is no single or simple solution, but for which the costs one. We have seen before how the market neglects the needs
of inaction are huge. of the populations of developing countries, where the absence
of a commercially valuable market held back the development
For these reasons, we decided at the start of our assignment or the availability of much needed drugs to combat malaria,
that we would publish a series of papers on what we saw as TB, and the HIV/AIDS epidemic. But the enormously successful
the key challenges. It would allow us multiple opportunities initiatives to stimulate the pipelines for these drugs over the
to raise the broad topic, but in each case focus on a specific past decade, including through ground-breaking public-private
part of the challenge. partnerships, have demonstrated just what can be achieved
with public and political mobilisation to overcome seemingly
We also decided to seek bold, simple but decisive solutions for intractable problems.
us to influence the world and ensure that AMR does not have
a chance of becoming a problem of the scale we identified. In the case of antibiotics, though, the fundamentals of the
situation are different, and the unmet need is not confined to
In our first paper, we showed that if we fail to act on AMR the developing world. Despite the existence of a growing unmet
then an additional 10 million lives would be lost each year to clinical demand, and affluent potential markets, the pipeline
drug-resistant strains of malaria, HIV, TB, and certain bacterial for new antibiotics has paradoxically experienced a long-term
infections by 2050, at a cost to the world economy of decline. Antibiotics are being developed, but not ones targeting
100 trillion USD. the most urgent needs, and not in the diverse portfolio required
to combat the rise of bacterial resistance.
We have identified the wide variety of things we need to do
to get to grips with this problem. These range from the very Given this, interventions should be possible to increase
basic – such as better hand-washing and sanitation to reduce commercial investment in antibiotics R&D, without
the spread of infections – to far more sophisticated issues such having to rely entirely on upfront funding from public
as the development and adoption of new technologies to improve and philanthropic organisations.
the way that we diagnose infections and prescribe antimicrobial
drugs. We need to make changes which reduce our dependence In this paper we propose a bold set of interventions which
on antimicrobial drugs and drastically cut our misuse and directly address the specific problems of antibiotic development,
overuse of them in humans and in animals. Our second paper and find ways to balance issues of profitability with access and
discussed five areas for immediate action where solutions can be conservation, so that commercial investment flows again into the
found without too complex challenges so long as the interested area. We set out here our initial ideas on how we think this can
parties are focused and determined. be achieved.
Another key dimension of this solution is ensuring that the We believe that the proposals we outline are amongst the most
world has a sustainable supply of antimicrobials. If we are to specific that have been made so far about both the new drugs
keep pace with the rise of drug resistance, we need to replace needed and their development costs. No doubt specialists in
those generations of drugs rendered useless by the emergence the field will have their own view on aspects of our suggestions.
of resistance to them. This is the specific focus of this, our Indeed we hope they do and make those clear to us: we will use
third paper. this input along with the other ideas we are developing as we
build to our final recommendations in summer 2016.2
EXECUTIVE SUMMARY
The problems and the causes of antimicrobial resistance (AMR) First, we want to make antibiotics R&D commercially
are diverse. In our two published papers so far, we have made the sustainable so that the field can attract the best minds from
case that the potential future human and economic costs of AMR research organisations, small biotech companies, large firms or
are too catastrophic to ignore; and set out five necessary steps not‑for‑profit entities. To do that we propose a system by which
that should be taken immediately to tackle this challenge. a global organisation has the authority and resources to commit
lump-sum payments to successful drug developers. Payment
In this paper, we focus on one element of the problem: would have to be set against selective criteria agreed in advance.
the need to boost the development of new antibiotic drugs. Such an approach would ‘de-link’ the profitability of a drug from
its volume of sales, supporting conservation goals by eliminating
Our analysis of the antibiotics that have been recently approved the commercial imperative for a drug company to sell new
and those at various stages of development shows a mismatch antibiotics in large quantities – a key factor in contributing to
between what we know the world needs, given emerging levels the development and spread of resistance.
of drug resistance, and the size and quality of the pipeline to
address this growing challenge. Creating a more stable commercial end market for antibiotics in
this way should, over time, encourage investment into the earlier
For example, there is rising resistance to ‘carbapenems’, a class stages of the pipeline. But we think we should also jump-start a
of antibiotics that constitute doctors’ last good line of defence new innovation cycle in antibiotics by getting more money into
against a range of potentially life-threatening infections such early stage research. A global AMR Innovation Fund of around 2
as pneumonia, and bloodstream infections. Yet perhaps only billion USD over 5 years would help boost funding for blue-sky
three compounds under development at the moment have research into drugs and diagnostics, and get more good ideas
the potential to be active against the vast majority of bacteria off the ground. Big pharma should have a role in paying for this
resistant to carbapenems, despite them having reached innovation fund: it needs to look beyond short-term assessments
worryingly high levels in some countries already. of profit and loss, and act with ‘enlightened self-interest’ in
tackling AMR, recognising that it has a long term commercial
The main reason for this mismatch is that the commercial imperative to having effective antibiotics, as well as a moral one.
return for any given new antibiotic is uncertain until resistance
has emerged against a previous generation of drugs. In other Finally, there are ways to further reduce barriers to drug
medical fields, a new drug is meant to significantly improve on development by lowering costs, improving the efficiency of
previous ones and so will become the standard first choice for research, and lowering global regulatory barriers wherever
patients quickly once it comes to market. That is often not true possible without compromising patients’ safety. Much has
for a new antibiotic: except for patients with infections that are already been done in this space but we should continue to
resistant to previous generations of drugs, a new antibiotic is explore ways to bring new drugs to market as quickly and
most probably no better than any existing and cheap generic as easily as possible.
product on the market. By the time that new antibiotic becomes
the standard first line of care, it might be near or beyond the end These interventions will require political leadership at a global
of its patent life. This means that the company which developed level. To work, it requires giving health authorities the means
it will struggle to generate sufficient revenues to recoup its to deliver the new system, with rules in place to limit unfair
development costs. free-riding by some countries or some companies. We do not
underestimate the difficulty but there are examples of successful
We set out proposals to address this problem and bring coordination in the health sector and we would like to learn
forward the financial reward to new antibiotics that address the lessons of initiatives such as UNAIDS on HIV/AIDS, GAVI
drug resistance. We think our proposals can radically overhaul on improving access to vaccines, or the Medicines for Malaria
the antibiotics pipeline over the next 20 years: our costs are Venture (MMV) to combat malaria.
modelled on achieving 15 new antibiotics a decade, of which
at least four should be breakthrough products, with truly novel
mechanisms of action or novel therapeutic profiles targeting
the bacterial species of greatest concern.3
These interventions will also require financial resources but the
cost is modest compared to the problem the world faces if AMR
is not tackled. Today in the US antibiotic resistance already
costs the healthcare system an additional 20 billion USD a year
1.In comparison, we estimate that a comprehensive package of
interventions could cost as little 16 billion USD and no more than
37 billion USD over the course of 10 years and would be sufficient
to radically overhaul the antibiotics pipeline. This money would
only be paid out when new and useful products are brought to
market, not as a taxpayer-funded subsidy upfront. Such sums
amount to a one-off increase, over the course of a decade, of
less than 10% on what the world today spends on antibiotics
(40 billion USD a year). This is hardly a high price to pay given
that antibiotics are essential to so many aspects of healthcare,
from common infections to surgery and chemotherapy.
We look forward to working with governments, industry
and other interested parties around the world over the next
12 months, as we develop these initial ideas further into a
more detailed package of action.
1. US Centers for Disease Control. Antibiotic Resistance Threats in the United States, 2013.
Available at http://www.cdc.gov/drugresistance/threat-report-2013/. Accessed May 20154
1.
WHICH NEW DRUGS?
Tackling AMR requires an adequate supply of new medicines to
beat drug resistance as it arises. This includes drug resistance in
HIV/AIDS, malaria, fungal infections, tuberculosis (TB), as well
as a range of bacterial infections.
Why this paper focuses on antibiotics
In this paper we have chosen to focus on resistance to antibacterial
drugs or ‘antibiotics’, for two main reasons.
First, antibiotic resistance has been described by the WHO as the
single greatest challenge in infectious diseases today, threatening
rich and poor countries alike, and yet so far it has not had nearly
sufficient attention in terms of medical research. As a global public
health threat, it should arguably receive the same kind of public
focus HIV/AIDS received in the 1990s or cancer research receives
today – although it may not need the same levels of public funding
to find a solution.
Malaria, and in particular the risk that artemisinin-resistant
strains of malaria could spread out of South East Asia into India
and beyond, is an immense challenge too: but despite all the
difficulties, it has been identified and is addressed with admirable
focus through the work of groups including the Global Fund to Fight
AIDS, Tuberculosis and Malaria. As a result, the pipelines for HIV,
TB and malaria can be considered to be on a more stable footing
than they were 20, or even 10, years ago: these efforts now need
to be sustained rather than fundamentally changed (see box on the
following pages). Such a push to promote antibiotic development
has barely started, with only relatively small pilot efforts deployed
recently by the US government and the European Commission.2
The second reason for focusing on antibiotics R&D in this paper is
that the market for antibiotics is different to that for other drugs
in the field of infectious diseases. It is a large and very profitable
market for many companies with in the region of 40 billion
USD3,4 annual sales globally, but despite this it fails to incentivise
enough R&D. It also gives rise to a set of problems that economists
call ‘negative externalities’5. When a patient uses an antibiotic,
a collateral effect is that it contributes to additional bacterial
resistance, which has a negative impact on all of society. But there
is also a positive externality of appropriate and proper antibiotic
use, from its role in controlling the spread of infection. These
effects must be taken into account when policymakers consider
the market for antibiotics, to ensure the incentives provided for
R&D balance the interests of patients, society as a whole and
drug developers.
2 For example, the European Innovative Medicines Initiative’s (IMI) public-private 3 Global Use of Medicines: Outlook Through 2017. IMS Institute for Healthcare
New Drugs For Bad Bugs project, and the US Biomedical Advanced Research and Informatics, 2014.
Development Agency (BARDA) broad-spectrum antimicrobials programme have
4 Hamad B. The antibiotics market. Nature Reviews Drug Discovery 2010; 9: 675-676.
between them spent 650 million USD over five years on antibiotic discovery efforts.5
The state of the current
pipelines for HIV, malaria and TB
HIV/AIDS Malaria
Since the 1980s, significant sums have been devoted to the Artemisinin resistance was first identified in Cambodia and
cause of HIV/AIDS research. The US National Institutes for Myanmar during the late 2000s, and there are now acute
Health (NIH) alone spends 3 billion USD annually on HIV/ concerns about the possibility of its spread within and beyond
AIDS research, providing a foundation for considerable further South-East Asia. This is one of the most alarming antimicrobial
spending by private firms developing lucrative treatments for resistance threats if it is allowed to continue to rise.
patients living with HIV in the developed world. At least 1.1
billion USD was spent on R&D activities specifically related As an area of research, malaria struggled to attract adequate
to treatments for HIV/AIDS sufferers in developing countries funding for many years, with private investment constrained
in 2013, of which more than 95% came from public and by the low incomes of the regions worst-affected by the
philanthropic sources (including the US NIH.) A significant disease. But by the efforts of innovative public-private
proportion of this – nearly 60% – was dedicated to research partnerships like the Medicines for Malaria Venture (MMV),
into HIV vaccines.6 great advances have been made in managing malaria
and in pulling new and improved treatments through the
The pipeline for new HIV treatments is generally regarded development pipeline. Initiatives such as this, with close
as being robust with close to 100 products currently under coordination of global research efforts, provide a strong basis
development at Phases One, Two or Three, or in pre- to support an adequate drug development pipeline.
registration.7 Although this features a significant number
of follow-on products which offer incremental rather than Thanks to these efforts, global R&D funding for malaria was
transformational clinical improvements over existing products, close to 550 million USD in 2013 – of which more than 80%
many offer benefits in terms of improved antiviral action and came from public and philanthropic sources.8 A major study
greater tolerability. Significant investments in vaccine research of the pipeline in 2012 identified 37 antimalarial products in
have resulted in a number of products entering clinical trials the development pipeline between pre-clinical studies and
(albeit with sometimes disappointing results), and there is Phase IV – then a significant increase on two years previously
evidence of some diversification within the pipeline towards 9.The current pipeline includes research across a number of
products tailored to the needs of users in low-income settings. fronts, including later-stage studies on malaria vaccines, with
The level of research into HIV has also yielded beneficial a focus on developing new treatments to combat the threat
spillovers into other areas of antiviral research, including of emerging artemisinin resistance.
significant new products for the treatment of viral hepatitis.
However, today there are still gaps in investment that
addresses the need for products where demand is restricted
to patients in developing country settings, such as vaccines,
and paediatric diagnostics and treatments.
5 Externalities are the cost or benefit that affect a party who did not choose to incur 6 G-FINDER Report 2014. Policy Cures, Sydney – available at
that cost or benefit. A classic example is pollution: when manufacturing products, http://www.policycures.org/gfinder.html
a company’s factory might pollute a local river, which puts a cost on people who
7 Wong A. The HIV pipeline. Nature Reviews Drug Discovery 2014; 13: 649-650.
drink the water and fish there. Externalities are often a justification for public policy
intervening in a market to regulate it.6
TB
Tuberculosis continues to inflict a great disease burden concerns that the pipeline was inadequate in countering the
globally. The spread of multi-drug-resistant (MDR) and threat of emerging drug resistance. Thanks to concerted global
extensively-drug-resistant (XDR) strains is most acute in efforts, a stronger pipeline has emerged in the past ten years
poor regions, where the challenges of TB treatment and – with 2013 seeing the approval of the first ‘breakthrough’ TB
control are the greatest and are exacerbated by high rates treatment, bedaquiline, in four decades. This, and other drugs
of HIV co‑infection. in the pipeline, offer significant potential for the development
of new combination therapies that are effective against MDR
The vitality of the TB pipeline is in large part intertwined with and XDR strains, or over shorter courses of treatment. But
that of the pipeline of new antibiotics, as these are needed as given we need at least four separate drugs to develop a new
the basis for new and more potent combination therapies. But combination treatment, and that drug resistance is a growing
just as important is achieving breakthroughs in the delivery problem, it is imperative to support these opportunities and
of TB treatments, to allow current treatment regimens for improve the pipeline.
MDR and XDR strains of six months or more – where patient
adherence is very low – to be reduced considerably in length, The continued efforts of non-profit and philanthropic
and their compatibility with HIV treatments to be improved. organisations in this field, such as the Global Alliance for
TB Drug Development, the Bill & Melinda Gates Foundation
580 million USD was spent on global R&D focussed on TB in (BMGF) and the Wellcome Trust will remain crucial in driving
2013, nearly 80% of it from public and philanthropic sources. forward the development of treatments on this front.
Much of the basic arsenal of antimycobacterial drugs for
treating TB was developed in the 1950s and 1960s, following Developers of antibiotics may need to be encouraged to
on from the early breakthrough in the development of explore how their products might be applicable as TB
streptomycin in the 1940s. The long period of very limited treatments. Such encouragement may need to be in the form
progress in TB treatment since the 1970s had prompted of support from major charities and public research grants.
8 G-FINDER Report 2014.
9A
nthony M P et al. The global pipeline of new medicines for the control and
elimination of malaria. Malaria Journal 2012; 11: 316-341.7
What antibiotics do we need and are
they in the existing pipeline?
Bacteria are commonly divided into two groups, Gram-positives We analysed the current antibiotics pipeline against these
(such as Staphylococcus aureus) and Gram-negatives (such as areas of urgent need. The Pew Charitable Trusts’10 published
Escherichia (E.) coli). pipeline for December 2014 identified 41 antibiotics currently in
development. On the face of it, this number sounds impressive,
Resistant strains of Gram-positive bacteria – such as but experience shows that a sizeable majority of these will
methicillin‑resistant Staphylococcus aureus, or MRSA – pose never progress to licensing. Furthermore, even where a drug
a continuing threat, but the range of antibiotics available to does achieve market approval, it may not prove successful
combat them remains comparatively robust, having been the in clinical practice, as a significant number are withdrawn
focus of the bulk of antibiotic discovery efforts over the past on efficacy grounds.11
two decades. In particular, a concerted focus since the 1990s
on tackling rising MRSA infections within US and European While most of the antibiotic products currently in the pipeline
healthcare systems appears to have been instrumental in are active against at least some of the list of pathogens identified
stimulating the relatively large numbers of products targeting by the FDA as posing a ‘serious threat to public health’, barely
Gram-positives in recent years. a third (16 drugs) show significant activity against multi-
resistant Gram-negative species. And only perhaps three
It is the emergence of resistant strains of Gram-negatives, have the potential to offer activity against the vast majority
though, that currently presents the greater threat to human life (>=90%) of the most resistant bacteria that doctors already
and modern medicine, particularly five Gram-negative bacteria: have to treat today. We refer to these as potential breakthrough
Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas antibiotics. This assessment indicates that the antibiotics
aeruginosa, Enterobacter cloacae and E. coli. These bacteria can be currently in development – some of which are still 10 to 15
deadly, causing infections ranging from urinary tract infections years from market – do not adequately fill the gaps in clinical
(UTI) to life-threatening pneumonias and bloodstream infections. need that already exist and will in most likelihood increase
It is harder for antibiotics to penetrate ‘Gram-negative’ bacterial as resistance spreads. In short, we need more potential
cell walls, and even if the drugs can get in, these bacteria are breakthrough antibiotics.
particularly good at pumping them back out again. Added to
this is the problem that there are an increasing number of Finally, the future health of the pipeline depends to some
multi‑resistant Gram-negative strains, with very few antibiotics extent on the state of it today: the most useful follow-on
that can currently combat them or that are being developed. This compounds that are currently under development or have come
is why they cause the greatest concern. to market recently are often the product of much earlier novel
discoveries. By having only a limited number of novel products
A more detailed assessment of these emerging patterns of drug under development today, we limit the scope for the pipeline
resistance, and the clinical need which they create, was prepared to yield useful follow-on compounds in years to come.
by the Review as the basis for expert consultation. A summary of
this is included with this paper at Appendix A.
10 http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/antibiotics- 11 Outterson K, Powers J, Seoane-Vazquez E, Rodriguez-Monguio, Kesselheim A.
currently-in-clinical-development, accessed April 2015 Approval and withdrawal of new antibiotics and other antiinfectives in the US, 1980-
2009. Journal of Law, Medicine and Ethics 2013; 41: 688-696.8
ANTIBIOTICS IN THE PIPELINE OR
RECENTLY LICENSED
20 1
15
1
10 1
5
0
Phase 1 Phase 2 Phase 3 Approved
High priority Low priority
Potential for activity against at least 90% of Does not meet the criteria for "clinically useful"
carbapenemase-producing bacteria in the UK
Medium priority
Targets at least one CDC 'Urgent' threat (Clostridium
difficile, carbapenem-resistant Enterobacteriaceae or
drug-resistant Neisseria gonorrhoea, but is not classed
as a potential break through)
Source: Review’s own analysis, pipeline data provided by Pew Charitable Trusts9
What would a successful
pipeline for antibiotics look like?
In considering incentives to stimulate the antibiotic pipeline, and accurate diagnostics to detect bacterial infections, identifying
we should not be seeking to support the development simply of the species causing them, and measuring antibiotic susceptibility
more new drugs. Nor should we be looking to intervene in those – so that prescribers can be confident that they can use a narrow-
areas where the market already works well. We should instead spectrum drug effectively.
target incentives at those drugs with the potential to address
the greatest unmet medical need. Faced with current patterns of emerging resistance, and given the
need for a balanced range of effective antibiotics, we believe that a
Inevitably, our future needs are hard to predict precisely, because supply of between two and four licensed ‘first in class’ compounds
drug resistance develops in unpredictable ways. An assessment or new therapeutic profiles active against key species every ten
of what we need can only be based on what we know today, and years would allow us to keep ahead in the race against antibiotic
could be altered by an unforeseen scientific breakthrough or resistance. This will hold true only if these new drugs are treated
step-change in antibiotic resistance. A number of agencies around as a well-guarded resource, accessible to all, but with limited
the world undertake their own analysis of the emerging threats usage only as warranted by resistance to existing drugs, rather
of drug resistance. But the world lacks any single authoritative than by an opportunity to exploit commercial potential.
assessment of AMR which could focus drug development efforts
towards the areas that present the biggest global risks. Therefore, For the purposes of the rest of this paper we will model the
we have defined what a ‘healthy’ antibiotics pipeline might look investment needed to achieve in the region of 15 new licensed
like, using input from experts to understand where the gaps are antibiotic therapies every 10 years; with incentives specifically
that need to be filled. focussed at generating two new broad-spectrum classes and
two new narrow-spectrum classes per decade.
As explained above, the most urgent need is to develop new
medicines that address the threat posed by drug-resistant It is very important that any new incentive system should not
strains of Gram-negative bacteria. But we should also seek to incentivise novel patentable drugs at the expense of existing
have an arsenal of antibiotics that is appropriately varied in terms off-patent drugs that could be revived, repurposed or combined
of how they can be used, striking the right balance between to break resistance. Both could be equally effective and the latter
broad spectrum drugs that can treat many infections, and are possibly quicker and cheaper to bring to patients. Research
narrowly‑targeted drugs. to make more out of our existing arsenal of drugs should be a
priority, as we have set out in our previous paper.12
On this basis, we urgently need new narrow-spectrum agents that
are active against resistant bacteria of public health importance This ‘ideal pipeline’ is used as an example and a starting point
(such as those which have developed resistance to carbapenems or to allow us to assess the cost of investment. We expect that this
colistin – our current ‘last line’ antibiotics.) New ‘broad-spectrum’ would be refined and changed as thinking and policy decisions will
agents are also needed that are active against a range of bacteria progress to stimulate the antibiotics pipeline. Ultimately, as set
with existing resistance. These new drugs would increase the out in more detail below, what may be needed is a framework to
chance that empirically-prescribed therapy would be appropriate, value and compare the benefits of different antibiotic projects in
even for infections resistant to our current antibiotics. the pipeline, possibly based on a points system. We look forward
to engaging with experts doing this work in the future.
However, broad-spectrum agents are a double-edged sword:
although an important tool, they are more prone to encouraging Having established the inadequacy of the current antibiotics
resistance to develop in many different bacteria, and cause pipeline and set out our ‘ideal’ pipeline, we now consider what the
‘collateral damage’ by harming the many good bacteria in our obstacles in the market are as it is currently structured and what
bodies that we need. Over the long term, reducing the length of or can be done to overcome these.
need for empiric, broad-spectrum treatment is an important goal.
This can only be achieved by embracing new generations of fast
12 Tackling a Global Health Crisis: First Steps – published February 2015 and available at
www.amr-review.org10
2.
IS THERE A PROBLEM WITH THE MARKET FOR
ANTIBIOTICS AND HOW SHOULD IT BE CORRECTED?
At first sight, antibiotics sales represent a large and potentially These features beg the question: why should any special public
profitable market that should not require more public support or charitable provision be made to stimulate antibiotics R&D?
than other commercial drug areas. It generates annual sales in
the region of 40 billion USD worldwide, in rich and poor nations We have considered three reasons why intervention could be
alike. Patients who use antibiotics are spread across all levels justified in this market. We believe the first two characteristics
of income, although many patients in the poorest parts of the below do justify some carefully conceived action to stimulate
world still suffer from not having good access to antibiotics. drug development.
It is hard to predict when a new
antibiotic will need to be used and
bring a return to its developer
Companies must make investment decisions years before an
antibiotic comes to market. It typically takes about 15 years for
a product to go from the start of initial research to marketable
product, with significant money needed upfront to fund a project
before knowing whether it will fail or succeed. The failure rates
of research into new antibiotics are high, with only between 1.5%
and 3.5% of drug compounds making it successfully from early
exploration to market approval13 . This means that in the majority
of cases a significant amount of money is invested in a product
where there is ultimately no financial return.
These problems are true of all classes of drugs, but the problem
is exacerbated in the case of antibiotics. This is because it
is hard to predict how big the health need will be at early
stages of investment. For many non-communicable diseases
like cancer or diabetes, there is information on demographics
and patterns of illness that allows developers to predict with
some degree of confidence the size and nature of their future
patient populations. But with antibiotics, in the absence of
resistance, older products (usually generic) can treat infection
just as well as new ones for far less money. So the market for
a new antibiotic is normally limited to a subset of patients
with resistant infections, which might be very small and spread
sporadically across a population. As mechanisms and patterns
of resistance and rates of infection can change quickly and
unpredictably, it is difficult for a developer to estimate with any
certainty the future size of the market for a new antibiotic, when
they need to do so many years before it reaches the market.
13 F
igures derived from data provided to the Review team by IMS Health UK and
selected pharmaceutical companies; see also Sertkaya A et al. Analytical Framework
for Examining the Value of Antibacterial Products. US Department of Health and
Human Services, 2014.CUMULATIVE PROFITS FROM
11
ANTIBIOTIC RESEARCH
Profit only achieved
in year 23
$200m
23
Years
$0
5 10 15 20 25 30
-$200m
-$400m
-$600m
-$800m
Preclinical Clinical On patent sales Off patent sales
research research
Source: Review’s own modelling of the discounted average expenditure and revenue for a sample of antibiotics R&D
projects based on historical input dating back to 2002 and forward projections provided by IMS health and selected
pharmaceutical companies. More detail on the modelling can be found at amr-review.org12
Effective generics, and necessary Some argue that antibiotics provide
conservation efforts, mean that sales lower returns than longer course
of new antibiotics will often be limited treatments such as diabetes or
Because bacterial resistance almost always emerges in response
cholesterol drugs
to new antibiotics, public health authorities will initially want to The case is often made that because courses for antibiotics
reserve any new drugs as a last line treatment, used only where are short – one to two weeks – companies make less return
existing products have already failed. So these new drugs will likely on their R&D investment than, say, for new breakthroughs in
become first and second line treatments only many years after chronic disease areas such as diabetes, where drugs are usually
their introduction, as older treatments will be lost to resistance. taken over the course of many years. Therefore companies tend
This contrasts with many other drug categories, where a new to prioritise other areas of research that are more profitable than
product to market will often immediately become the first-line antibiotics, or so the story goes.
treatment of choice across the marketplace.
This on its own is not a strong argument for intervening in the
The result is that the drug developers who come up with a new market for antibiotics, other than perhaps encouraging the price
antibiotic create considerable benefits for society but are not of new antibiotics to increase enough to provide a sufficient
guaranteed to benefit financially: the drug only starts being return. Some other classes of drugs have become commercially
used for the general population of patients many years after it lucrative despite providing short, curative courses of treatment –
was licensed, by which time it may be off-patent and can be but have usually done so via very high prices – a point we return
manufactured by any company as a generic product. to below.
This situation creates a tendency for companies to wait until
“
resistance is already rising in an area before deciding to invest.
We need to look at systems that pay for drugs with
This time lag means that the pipeline is likely to yield drugs for
particular problems only once they have become established a financial reward that reflects better the benefit
medical problems – something evidenced by the significant
that the drug is likely to offer society in the long
number of products targeted at Gram-positive MRSA infections
over the past 15 years. In the case of MRSA, researchers were able term instead of looking at the narrow period during
to rely on relevant discoveries made during the 1980s and 1990s
”
which they are ‘on patent’
that were fit for being developed into new products: this is why
the void was filled relatively quickly. This is not the case for new
antibiotics active against Gram-negative bacteria where research
for new molecules often has to start from scratch.
Taken together, these reasons mean we need to look at systems
that pay for drugs with a financial reward that reflects better
the benefit that the drug is likely to offer society in the long
term instead of looking at the narrow period during which they
are ‘on patent’. Such a system will also be able to reflect the
enormous ‘insurance value’ to society from having an effective
supply of antibiotics – something on which so many aspects of
modern healthcare depend. Like any form of insurance, we hope
that these new generations of antibiotics should not need to be
widely used – but we should value highly the protection that they
provide. Without an approach that properly reflects this value,
we cannot expect commercial investment in antibiotics R&D at
a sufficient level.13
So there is a strong case for some
market intervention to ensure enough
investment in antibiotics R&D, while
conserving the new drugs so they
last longer
The profitability of a new drug hinges on the simple fact that Based on experience in other areas (see box on page 14 for an
revenue increases the higher the price and the higher the example based on the regulation of morphine as a pain killer,
volume of sales. Companies are incentivised to increase their and restrictions on the use of artemisinin), we are concerned that
sales, even if these extra sales have little or no medical value and a purely regulatory approach to conserving antibiotics could harm
come at the cost of adding to drug resistance. This leads to a access to them, which is already a major problem for many of the
large amount of over‑use for antibiotics and is at odds with the poorest people in the world. Systems of regulation rarely work
objective to conserve antibiotics to make them last longer before when there is a large financial incentive for producers or suppliers
resistance arises. to break them.
Put simply, there are two ways to address this problem which We also think that an approach based solely on increasing the
are often seen as being on opposite ends of a spectrum of policy price of antibiotics to stimulate investment and reduce over-use
interventions. One way is to use regulation: prohibit the overuse would not be sufficient. The reasons why are set out in more
and misuse of antibiotics. The other way is to use markets: detail below.
increase the price of antibiotics until most overuse and misuse
becomes unaffordable. This is why we look for solutions that can make antibiotics
R&D profitable to pharmaceutical companies by creating more
Neither extreme is effective on its own, so we have considered certainty of demand while also supporting prudent use of these
the best possible intervention in between. new drugs, so they can last longer before resistance arises.
Of course a lot can be improved in the way we manage the
“
demand for antibiotics and this is an important focus of our
work14 . But as long as the financial incentive for companies is As long as the financial incentive for companies
solely to maximise the volume of antibiotics they sell, it is very
is solely to maximise the volume of antibiotics
difficult for governments and healthcare systems to regulate
the sale of antibiotics effectively. This is a problem everywhere, they sell, it is very difficult for governments
even in the most developed countries and it is an issue that
and healthcare systems to regulate the sale of
drives inappropriate antibiotic use, particularly in middle
”
income countries. antibiotics effectively
14 See Section 7 on our next steps for more detail on how we will be covering such
issues in future papers.14
Better regulation has a role to play in stopping
overuse, but it can be a losing battle when
financial incentives are not aligned:
the case of malaria drugs and morphine.
Artemisinin (a malaria drug) is regulated to stop its use as with high incomes are often able to get hold of the drugs
a mono-therapy (which would breed drug resistance), while despite regulation, whilst poor patients are usually unable
morphine (a powerful but highly addictive opioid analgesic) is to. As a result, in up to 150 countries patients have difficulty
regulated to stop it being used as a narcotic. Both attempts are in accessing cheap opioid painkillers because of failing
examples of how well-intentioned government regulation can government regulation15.
fail at preventing misuse and produce damaging unintended
consequences. With artemisinin, many governments have These examples show the risks associated with both excessively
failed to stop generic products from being supplied as cheaper strict regulation, and weak enforcement, and demonstrate
mono-therapies, which in the short term are as good at the potential pitfalls of relying on government regulation as
fighting malaria but lead to rising levels of drug resistance in a means of controlling access to and the use of vital drugs.
patients. Stopping counterfeits and regulating all companies
is hard in any context. It is made harder when health Despite all of this we do think that regulation has a hugely
regulators are under-resourced as is often the case and given important role to play in stopping over‑use. Much of the
governments have a simultaneous desire not to reduce access problems outlined above could be mitigated against through
to affordable artemisinin products. better funding of regulatory authorities and stronger
international rules (something we will look at perusing for
In the case of morphine, governments have tended to place antimicrobials), and there are many cases of great success
greater emphasis upon limiting use, because of concerns achieved through regulation. However we think that on its
that it will be misused for recreational purposes. This means own regulation is not capable of curtailing overselling as long
that its supply is tightly regulated in most countries in the as pharmaceutical companies have a clear incentive to oversell
world, severely harming legitimate access to morphine as their products.
a painkiller in low and middle income countries. Patients
15 Shetty P. The parlous state of palliative care in the developing world.
The Lancet 2010; 376 (9751): 1453-4.15
To support antibiotic development,
three sets of interventions are needed
We considered a range of interventions that could be used to
stimulate antibiotics R&D. We think three sets of interventions
need to be pursued simultaneously:
1.
First, create a more predictable market for antibiotics to
sustain commercial investment in R&D – where it is necessary,
change how antibiotic developers are rewarded, to ensure a more
predictable financial reward for developers of critically‑needed
“
We believe that such a package of interventions
at different stages of the pipeline can promote a
sustainable pipeline of new antibiotic therapies,
new drugs, support conservation efforts, and ensure good
at a cost that is affordable and will provide value
value‑for-money for purchasers and equitable access.
”
to taxpayers
2.
Second, new focused funding into early-stage research to
tackle AMR – as we described in our second paper, we are
concerned that there are gaps in research funding for AMR:
early-stage and ‘blue sky’ scientific research into AMR and new
antimicrobials lags behind other clinical areas. We propose the
establishment of a global AMR innovation fund to redress this
imbalance, by providing a means of directing more money into
AMR research in a more targeted and coordinated way.
3.
Third, interventions to support efficient drug development
through centralised public platforms for clinical trials,
better sharing of information at early stages and regulatory
harmonisation when they do not endanger patient safety–
such interventions have the potential to make the discovery of
new antibiotics less costly.
We believe that such a package of interventions at different
stages of the pipeline can promote a sustainable pipeline of new
antibiotic therapies, at a cost that is affordable and will provide
value to taxpayers.A PLAN TO OVERHAUL
16
ANTIBIOTIC DISCOVERY
Support a viable market
for the highest
priority antibiotics
Middle-stage
interventions
to catalyse
drug discovery
Better-funded
early-stage research17
3.
CREATING A MORE PREDICTABLE MARKET
FOR ANTIBIOTICS TO SUSTAIN COMMERCIAL
INVESTMENT IN R&D
We start with the need for governments to intervene in the
market for antibiotics: in our view the first and most important
step to fixing the supply problem is to make the market more
predictable and therefore more attractive for commercial
investment in R&D.
Some of our guiding principles have been as follows.
1. 4.
Focus any public intervention in the market where it is
Seek to open the field of antibiotics R&D to new players.
specifically required to develop the most-needed products.
Our interventions are aimed at setting a level playing field so
The market remains a good way of allocating drug development
that as many actors as possible can enter a competitive field of
resources in most cases, but comes up short in this instance
research into antibiotics – small and large companies, academic
when faced with excessive uncertainty. Defining the ‘unmet
research teams, not-for-profit entities and partnerships between
need’ over a long time horizon is important, but needs to be
private and public sector actors. This could be an opportunity
done as flexibly as possible to cope with the unpredictability of
for companies in the BRIC countries and elsewhere to go up the
emerging resistance.
value chain and enter the field of drug development making use
of their specific needs and specific know-how.
2.
These principles have led us to recommend a market intervention
Aim to provide value-for-money in the use of public funds.
which involves rewarding the most needed new antibiotic
For instance, interventions should not increase the reward for
therapies at least partially through the payment of a predictable
products that are already adequately supported by the current
lump sum. This is to incentivise commercial investment into R&D
market mechanisms.
as well as compliance with rules to conserve future antibiotics.
The features of this market intervention are described below.
3.
We have ruled out a number of other potential interventions
The intervention must address the negative externality
such as patent life expansions, transferable patent vouchers and
created by antibiotics: the fact that individuals using
relying solely on higher prices to stimulate R&D investment and
antibiotics inadvertently (and unavoidably) impose a cost
constrain consumption. The reasons for ruling these interventions
on society as a whole by increasing bacterial resistance.
out are set out in more detail in Appendix B below.
This would be less of an issue if rapid diagnostic tests were
available and always used before prescribing antibiotics, or if it
were cheap and easy to renew the supply of antibiotics – but
neither is true at present.18
Profitability should be ‘de-linked’ Certainty
from volume of sales Companies need to be sure that they will get a reasonable return
Given the difficulty in significantly curtailing use while there is an for their investment. As already discussed investment decisions
incentive for drug companies to sell more drugs, and in the face are made years – or even decades – before a drug might reach
of weak market incentives for private companies to undertake the market. Investors therefore need to have confidence that
research into areas that society needs but that are not profitable, in 10 or 15 years’ time they will be appropriately rewarded if
we believe that a successful intervention must partially or fully they develop an effective, valuable product. This means limiting
‘de-link’ profit from sales. This means that one or several lump the scope for political cycles to influence assurances of future
sums would be paid to the developer regardless of how many reimbursement. Investors do not like risk, and need greater
courses of drugs are sold. De-linkage is a widely researched topic levels of compensation the greater they perceive the risk to be –
and there are many different ways to implement it, which we will requiring, in turn, higher eventual payoffs.
go on to discuss.
In the absence of a predictably lucrative market, mechanisms
This approach can guarantee developers an appropriate return are needed which allow payers to make commitments to an
on investment where they produce an antibiotic that fills an alternative, de-linked means of reimbursement many years in
unmet need, even where sales may not be high enough during advance of products reaching market, which drug developers
the patent life of the product to justify their spending and will trust. But while offsetting the economic risk of antibiotic
risk‑taking. It also reduces the incentive to oversell antibiotics development, such interventions should not seek to indemnify
and can play an important role in conserving future drugs. developers entirely against the scientific risk inherent in
antibiotic development – that is, the risk that a product fails
during development or proves to be ineffective in practice once
An effective de-linkage system has it does reach the market. Pharmaceutical companies are adept
at managing this type of risk across their R&D portfolios: we do
a number of key requirements not see antibiotic development as necessarily being an exception
Any successful system that introduces de-linkage to the to this, and it is not a burden which can efficiently or justly be
antibiotics market will need to be implemented carefully, to transferred to public bodies.
balance certainty for developers with value for payers, while
ensuring efficiency and minimising implementation risk.
Efficiency
Scope Any system needs to be good value for money for society.
We need to make sure we pay enough to get the drugs that we
The new system needs to be designed such that the best need, whilst not wasting public money.
drugs are drawn into it. It should incentivise the new therapies
that we need the most, whether they are based on new
patents or old molecules. In designing such a system, we
would need to guard against the risk of developers not being
incentivised to bring forward their most promising products
to the new de‑linked market, something which would result
in significant lost opportunities.19
What to pay, and when?
Under many models of de-linkage, the absence of an value for money will depend on defining a particular drug’s
efficiently-functioning market leaves a question mark ‘worthiness’ in combatting AMR, and structuring payments
hanging over how to set the right ‘price’ for new antibiotics, in a way which optimises outcomes both for the payer and
and how best to phase reimbursement. Where antibiotic the product developer.
producers are reimbursed directly via public funds, achieving
Defining value
This would need to be judged against a clear set of criteria
the payer has more knowledge about the product and does
and independently adjudicated. Such assessment would need
not risk buying a product that is ultimately unsuccessful.
to look at the level of unmet need fulfilled by the product,
as well as its likely efficacy – factors which would determine
To give an example of the effect of this discounting, paying
its ‘score’ against defined criteria, which are linked to
2 billion USD as a lump sum the year a product is launched
payments afterwards.
has about the same effect on its profitability as 6.5 billion USD
worth of sales over the following 20 years. 2 billion USD at the
Such an approach would need to be considered both for
time of launch is also worth the same as 2.8 billion USD in year
‘first in class’ products, and also subsequent follow-ons.
three. The payer gets much better value for money paying for
Many follow-on drugs offer only minor improvements upon
a drug early.
existing antibiotics – so should not qualify for the same
levels of reimbursement as genuinely ground-breaking
On this basis, the bulk of a payment should come at the
products. However, where a follow-on drug manages,
earliest point that a drug’s effectiveness and quality can be
for instance, to significantly reduce toxicity compared
confidently and meaningfully assessed – in practical terms no
to their predecessors, or circumvent established patterns
less than about two to three years after it reaches the market.
of resistance, they should be rewarded appropriately.
Some funding may need to be provided in the interim to allow
the company to sell the drug in this period.
If some areas of research, such as combination therapies,
prove able to provide effective products but at a markedly
In some cases, it may be efficient for Governments to provide
lower development cost than conventional antibiotics, there
money prospectively during drug development process,
would be a case for considering whether their lump sum
for instance as milestone payments at given points in the
payment is lower to ensure that their level of expected profit
development process. Alternatively, this could be a full product
is broadly similar. However as a general principle, we believe
development partnership. These interventions can help lower
that the payment level should be based on a product’s value,
the cost of development and can offer good value for money
and that developers who achieve the same results at lower
depending on the probability of success of the project because
cost should be allowed to make a greater profit.
they require the public sector payer to take on the scientific
risk. In other words, when the public sector makes a payment
Timing of payment and what it means
into a project early on, a smaller amount can have a big impact
for sharing risk between private and
but because the project may fail the government has to pick
public sectors
and pay for many different projects upfront. The later the
public sector makes a payment, the more expensive it will be,
There is a trade-off in paying for drugs early versus
but it only needs to buy projects that have succeeded already,
late in development. The earlier that companies are
leaving the private sector to make the upfront investment.
paid, the cheaper it is for the payer, as pharmaceutical
companies’ discount rates are so much higher than those
of governments. However, delaying payment ensures that20
We see two broad approaches Creating an initial ‘critical mass’ of willing countries signed up to
a global scheme is essential if so-called ‘free-rider’ problems
for implementing de-linkage, (i.e. a situation where countries are able to benefit from the
requiring different levels of drugs generated without contributing directly) are to be avoided.
Such an issue cannot be eliminated entirely, but a global body
market intervention with the ability to control the terms upon which countries access
There are broadly two ways in which a de-linkage model the antibiotics would be able to go some way towards mitigating
could work, each requiring different levels of global coordination its effects.
to implement. These represent the basic structures which we
believe are the most promising – and which we want to use The principal advantage of this system is that a single global
as the basis for much more detailed discussion over the course body operates in the public interest and controls the rights to
of the next 12 months. the drug, so is able to insist on high standards of conservation
from nations and prescribers as a condition of supply. This allows
usage to be managed according to clinical need and emerging
A new global buyer
patterns of resistance, rather than being subject to commercial
forces and irresponsible or sub-optimal prescribing.
The most radical means of implementing de-linkage would be
for a designated global body, with a broad base of buy-in from
On the other hand, setting the prices for this type of buyout
nation states, to establish a mechanism to purchase the global
would be difficult: it needs to be sufficient to repay the
sales rights to new antibiotics, and to subsequently manage
developer’s investment and reward their risk-taking, without
their supply internationally. The development and manufacture
‘over-paying’. As an approximate figure based on our modelling,
of drugs would still take place within the pharmaceutical
we estimate that a reasonable global buyout price for a new
industry, drawn through the pipeline by the incentive of a full
‘buyout’ of their product once it is ready to market. Although
“
the developer would surrender the right to market their new
To function effectively, such a body would require
drug, they would be reimbursed by an amount sufficient to
ensure an adequate return on their development costs, and the buy-in from a suitable number of countries who
the investment risk incurred.
together have sufficient buying power to be global
”
Eligibility for such a buyout, and the price at which this would ‘market makers’
be done, would be set transparently against well-defined criteria,
providing developers with as much certainty as possible, and
ensuring that new antibiotics are reimbursed according to their antibiotic would be between 2-3 billion USD. These figures
value (or potential value) to society. should be higher for areas where there is acute clinical need,
and should vary based on the general quality of the product.
With full control over the marketing and supply of a new They also might need to be higher in some areas, for example
antibiotic, the global body would in principle be able to ensure pneumonia, where clinical trials are inherently more expensive
that the drug is used internationally according to unmet need to conduct. This is less than the price that health systems might
and patterns of emerging resistance, subject to strict conservation pay for a new antibiotic during its patented life currently, but
measures but still accessible to countries at all income levels. nonetheless represents a very significant commitment of public
funds to a single drug.
To function effectively, such a body would require the buy-in
from a suitable number of countries who together have sufficient
buying power to be global ‘market makers’. This could beneficially
be a group such as the G20, or even broader; but, equally, the
current size distribution of pharmaceutical markets means that
it would be viable with the backing of a much smaller grouping
of affluent nations.You can also read
